Need Clarity On GST Rate, New Emission Norms: Daimler

Hannover: Seeking clarity at the earliest on the Good and Services Tax (GST) rate and its rollout as well as new emission norms, German auto major Daimler on Thursday said these issues are causing “much risk and uncertainty” in the market.

“India started out with a good year. First quarter was excellent, 25 per cent up (for the company in terms of sales), year-over-year,” member of the board of management at Daimler AG responsible for Daimler Trucks and Buses Wolfgang Bernhard told reporters here.

“However, the government managed to bring it to a sudden halt by announcing GST without naming a number and a date when this GST will be introduced,” he said on the sidelines of 66th IAA Commercial vehicles exhibition.
“This causes much risk and uncertainty in the market place and people hesitate right now to buy trucks,” he added.

“So it’s my advice and my request to the Indian government to overcome this uncertainty as fast as possible and please tell us the number and tell us a date and as soon as possible overcome the uncertainty in the market,” Mr Bernhard said.

He said right now the Indian market is slowing down again.

“We are now at a level of last year all the good prospects of start of this year have been wiped out by this announcement.”

He added, “Our customers are hesitant, they don’t know whether they should buy now or next year because they don’t know the date and number. They suspect that they might be able to buy a cheaper truck next year due to the new tax regime. But they don’t know. Nobody is certain everybody is waiting. You need a number and and date and everything clears up.”

Secondly, there is also a lot of uncertainty about the Bharat Stage 4 emission norm, he said.

“Nobody knows when Bharat 4 will be introduced in the country. We are also very interested to learn what date Bharat 4 will be mandated nationwide. It is very important to know, just remove the uncertainty,” he said.

On the overall sales, he said, “We believe that after a good start in the first quarter this growth number will not be maintained throughout the year 2016 and it’s not the question we can do, this is something which the government has to address.”

When asked whether the company has spoken to Indian government on the issue, Mr Bernhard said, “Of course, we always do. It’s not our sending it’s them responding.”

He said it is not clear when the government will be able to come up with a solution. “Because it’s not a simple process of political decision making, this is very complicated I assume.”

“There is a question whether we will be able to introduce the new system by April next year with the beginning of next fiscal year. That will be highly desirable.”

So much is in the hands of the Indian government and it is much desirable to get a number and the definite date as soon as possible, he added.